Pivotal year sees green credentials boosted amid investment for the future
CELEBRATED ice cream maker Mackie’s of Scotland has achieved its highest ever UK market share after adding almost half a million customers across England, Wales and Northern Ireland.
The major breakthrough came despite a tough time in the ice cream sector, as the overall market contracted by 7.4% over the same period.
Record increases in the cost of ingredients, haulage, feed and fertiliser have combined to make the outlook a challenging and unpredictable one for Scotland’s most popular ice cream company.
Mackie’s says the growth of UK customers outwith its traditional Scottish market and its early adoption of renewable energy has helped it offset rising cost pressures and to build for the future.
Kantar Worldpanel reported that the ice cream maker’s customer numbers in England, Wales and Northern Ireland climbed from 939,000 in 2021 to 1,424,000 in 2022.
Mac Mackie, Executive Chairman and one of three family owners at Mackie’s, said: “We are putting in place the foundations to be a bigger business and one that is even better equipped for growth in the years ahead.
“It’s been a pivotal year in our history. We witnessed this encouraging step change in our sales and cut-through south of the border, predominantly as a result of us winning and building on second-line listings for our honeycomb ice cream with a number of supermarkets, including Sainsbury’s.
“For a long time, it’s been the case that our Scottish customers have been able to choose from a wide range of our ice cream flavours, but those in the rest of the UK could typically only reliably get their hands on our best-selling Traditional flavoured real dairy ice cream. We’re thrilled to be reaching new customers and determined to build on the success of these new listings.
“It’s also been a very difficult year due to the scale of the cost increases we have been subject to. While this looks set to continue and worsen, we have robust plans in place to ensure the family business rides out the storm and is here to be successful for generations to come.”
The Aberdeenshire firm posted revenue of £17.7 million and profit before tax of £1.7 million according to annual accounts to the year ending 31 May 2022. While down 59% on the record highs of the previous year (£4.1 million), this profit represents a positive return above initial forecasts. Revenue has since rebounded due to strong sales, with the calendar year rivalling previous record levels of turnover, though profit is forecast to fall further in light of steep cost increases.
The significant wider ice cream market shrinkage over the same period has been attributed to increases in cost pressures and a market rebound following surging take-home ice cream sales during the pandemic.
The audited period also saw Mackie’s continuing commitment to investment being made back into the business, most notably the culmination of a £4.5 million spend into the one of Europe’s most efficient and advanced low carbon refrigeration systems.
Currently partly operational and set to be fully deployed in the coming weeks, the cooling system will slash the firm’s refrigeration-related energy usage by up to 80% along with its carbon footprint. It will enable Mackie’s to make more efficient use of its vast renewable energy generation capacity, courtesy of its on-site 7000 panel solar farm, four large-scale turbines and biomass plant, which combined produce twice as much energy as the business uses overall.
Further investment has seen Mackie’s upgrade its filling machines to significantly increase capacity, while also bringing most of its sauce making in-house with an investment in state-of-the-art machinery, allowing it to purchase the fruit required for its compotes from local farms.
The programme of investment also encompasses further improvements to its packaging plant as well as the implementation of a market-leading enterprise resource management tool to streamline internal processes.
Newly appointed Managing Director, Stuart Common, commented: “Like all businesses we’re facing major challenges resulting from rising costs throughout our operations which has led to careful negotiations with our trade customers while we do our best to manage and absorb increases that may otherwise be passed on to the wider public.
“Despite the restrictions associated with the pandemic, we have maintained export sales of over £2 million, which includes increased export to the US, which poses an exciting opportunity for growth.
“We’ve committed to unprecedented levels of investment into our operations to make us a more efficient and sustainable business as well as being better insulated from some rising costs and position us for further future growth. 2022 saw more than £850,000 invested in plant and machinery, which included a new ice cream filler which will give us more options for new products as well as increasing our capacity as we look to continue to grow.
“I believe that our long-term strategy of doing right by the planet and investing so significantly in renewable energy is now giving us the tools to create a competitive advantage, allowing us to continue to offer shoppers a premium dairy product at what we think is an affordable price, particularly when compared to many other premium products in the market which have had to rise higher and faster.
“Our sustainable investments are now paying dividends by helping us to overcome this challenging period, expand our market presence and boost our contribution to the local and national economy over the years ahead.”